The ACT has won the first stage of Australia's space race, with a new agency designed to tap into the $US345 billion ($457 billon) industry to be initially co-located with Canberra's Industry Department.

Last week's federal budget included $41 million in funding for the establishment of the agency, including $15 million in initial funding for investment in international missions and projects to boost Australian business involvement in the global industry.

The government wants the new space agency to engage and collaborate with state and territory governments, academia and industry, and advise on the most suitable strategic arrangements for its long-term location.

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The ACT and jurisdictions including South Australia and the Northern Territory are bidding to permanently host the new agency.

It will be charged with preparing a national space investment plan during early months of operation.

While the global industry is growing at about 10 per cent a year worldwide, an expert review panel estimated Australia accounted for only 0.8 per cent of the industry.

Effective development could result in between 10,000 and 20,000 high-level jobs and add to Australia's scientific and technological capability.

The review recommended Australia build on its strengths in communications technology, space services including situational awareness and debris monitoring, ground stations, and other areas where the domestic industry could "leapfrog" other countries.

The government believes the new agency's work could help a new generation of space-enabled products and services, already used in communications, defence, mining, agriculture, transport and weather forecasting.

Senator Cash said Australia's move to join the global space industry had the potential to be worth as much as $12 billion by 2030.

"We have an extraordinary opportunity to increase our share of the growing global space economy," she said.

"Space technologies are not just about taking people to the moon; they open up opportunities for many industries, including communications, agriculture, mining, oil and gas.

"An Australian space agency will support the long-term development of space technologies, grow our domestic space industry and secure our place in the global space economy.

"Through our $300 million investment in space industry and technology, the Turnbull government is allowing businesses across the economy to prosper, enter new markets and create jobs."

Separately, the government is investing $225 million to improve the accuracy and availability of satellite positions across Australia, and enhance the use of GPS in rural and regional areas.